Watkins Machinery Company uses a normal job costing system. The company has the following partial trial balance information for March, the last month of its fiscal year:

Materials inventory (X, $7,500; Y, $5,000; Indirect materials, $12,500)	$	25,000
Work-in-process inventory (this is Job 101)		13,200
Finished goods inventory (this is Job 100)		22,000

These transactions relate to the month of March:

1. Purchased direct materials and indirect materials with the following summary of receiving reports:

Material X	$	25,000
Material Y		25,000
Indirect materials		12,500
Total	$	62,500

1. Issued direct materials and indirect materials with this summary of requisitions:

	Job 101				Job 102				Total
Material X	$	12,500			$	7,500			$	20,000
Material Y		10,000				3,000				13,000
Subtotal	$	22,500			$	10,500			$	33,000
Indirect materials										20,000
Total									$	53,000

1. Factory labor incurred is summarized by these time tickets:

Job 101	$	26,400
Job 102		17,600
Indirect labor		12,500
Total	$	56,500

1. Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows:

Utilities	$	1,250
Depreciation		37,500
Insurance		6,250
Total	$	45,000

1. Factory overhead costs were applied to jobs at the predetermined rate of $15 per machine hour. Job 101 incurred 3,000 machine hours; Job 102 used 2,000 machine hours.
2. Job 101 was completed; Job 102 was still in process at the end of March.
3. Job 100 and Job 101 were shipped to customers during March. Both jobs had gross margins of 20% based on manufacturing cost.
4. The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March.

Required:

1. Prepare journal entries to record the transactions for the events from parts (a) through (g).

2. Compute the ending balance of the Work-in-process inventory account.

3. Compute the overhead variance and indicate whether it is overapplied or underapplied.

4. Close the overhead variance to the Cost of goods sold account.